An employee referral program is a structured internal hiring strategy where existing employees are encouraged to refer potential candidates for job openings within the organization. The metric used to measure the success of an employee referral program within an organization. It is calculated by determining the percentage of new hires who were brought into the company through employee referrals.
The employee referral rate is calculated by dividing the number of employees hired through referrals by the total number of new hires and then multiplying the result by 100 to express it as a percentage. Organizations often find that hires made through employee referrals tend to be of higher quality. This is because employees are likely to refer individuals they know and trust.